Bhopal Cooperative Central Bank Maryadit, Bhopal vs State of M. P.

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(MP) 682

IN THE HIGH COURT OF MADHYA PRADESH
Mohammad Rafiq, C.J., Rajeev Kumar Dubey and
Vijay Kumar Shukla, JJ.
Bhopal Cooperative Central Bank Maryadit, Bhopal and Others v. State of M.P. & Others
Writ Petition No. 421 of 2019 with Writ Petitions No. 4057/2019, 4339/2019, 4915/2019, 4919/2019, 5124/2019, 5535/2019, 6038/2019, 6607/2019, 7065/2019 and 7518/2019 (Jabalpur); Decided on 22.4.2021.

Advocates:
Smt. Shobha Menon with Rahul Choubey for petitioners in W.P. No. 4021/2019; Sanjay Ram Tamrakar for petitioners in W.Ps. No. 4915/2019 and 4919/2019; Rahul Deshmukh for petitioners in W.Ps. No. 4057/2019, 4339/2019, 5124/2019 and 6607/2019; Anil Lala for petitioners in W.Ps. No. 6038/2019 and 7518/2019; Naveen Dubey for petitioner in W.P. No. 7065/2019; Rajendra Kumar Shrivastava for petitioner in W.P. No. 5535/2019; R.K. Verma, Additional Advocate General for respondents/State; Ankit Saxena for respondent No. 6.

Headnote:
¼1½ lgdkjh l¨lkbVh vfèkfu;e] 1960 ¼e-ç-½ && èkkjk 48 & dd rFkk 50 &d ¼2½ && lquokÃ dk volj && fjV ;kfpdk Øekad 6913@2017 czt dqekj puiqfj;k fo-e-ç- jkT; fu.kÊr fnukad 15-5-2017 rFkk fjV ;kfpdk Øekad 551@2019 varj flag fo- e- ç- jkT; fu.kÊr fnukad 17-5-2019 && dksbZ çdV erHksn ugÈA 2015 jk- fu- 135] 2012 ¼2½ ,e ih ,p Vh 352 rFkk 1969 ,e ih ,y ts 683 fufnZ"VA ¼iSjk 10 ls 15
¼2½ lgdkjh l¨lkbVh vfèkfu;e] 1960 ¼e-ç-½ && èkkjk 48 & dd rFkk 50 & d && e-ç- lgdkjh l¨lkbVh fu;e] 1962 && fu- 45 ¼3½ && micaèk¨a rFkk uSflxZd U;k; d¢ fl)kar dk ykxw g¨uk && lapkyd¨a rFkk çfrfufèk;¨a dk gVk;k tkuk ,oa fujgZrk && D;k n¨u¨a micaèk fÒUu&fÒUu {ks= esa ykxw g¨rs gSa] vFkkZr~ ds fuokZpu iwoZ rFkk i'pkr~ && èkkjk 48 & dd n¨u¨a ifjfLFkfr;¨a esa] vFkkZr~ fuokZpu d¢ iwoZ ds çØe ij rFkk fuokZpu d¢ i'pkr~ ds çØe ij ykxw g¨rh gS && èkkjk 50 & d fuokZpu d¢ i'pkr~ ds çØe ij ykxw g¨xh && èkkjk 48 & d d esa leqfpr lquokÃ dk volj fofufnZ"Vr% micafèkr gS && èkkjk 50 & d esa ,slk micaèk ugÈ && dkuwu esa uSlfxZd U;k; d¢ fl)kar dk ikyu iढ+k tkuk pkfg, D;¨afd rRçfrdwy d¨Ã Li"V vkKk ugÈ gS && n¨u¨a micaèk fÒUu&fÒUu {ks= esa ykxw g¨rs gSaA
vfÒfuèkkZfjr% ek= bl rF; ds dkj.k fd foèkku eaMy us èkkjk 48 & dd esa mu lnL;¨a d¨ ftUgsa in ls fujfgZr fd;k tkuk pkgk x;k gS] leqfpr lquokÃ dk volj fn, tkus dk fofufnZ"V micaèk fd;k gS tcfd èkkjk 50 & d ¼2½ d¢ ijarqd esa ,slk ugÈ fd;k gS] ;g rkRi;Z ugÈ g¨xk fd foèkku eaMy dk vfÒO;ä vk'k; uSlfxZd U;k; d¢ fl)kar dk ykxw g¨uk vioftZr djus dk FkkA ¼iSjk 16
èkkjk 48 & d d n¨u¨a ifjfLFkfr;¨a esa ykxw g¨xh] vFkkZr~ fuokZpu d¢ le; ¼vFkkZr~ fuokZpu&iwoZ çØe½ vFkok ;fn d¨Ã O;fä fuokZpu i'pkr~ fujgZ gks tkrk gS ¼vFkkZr~ fuokZpu&i'pkr~ çØe½A èkkjk 50&d dh mièkkjk ¼1½] ftlesa micaf/kr gS fd d¨Ã Hkh O;fä lfefr ds lnL;] çfrfufèk ;k çR;k;qä ds :i esa fuokZpu gsrq vH;FkÊ g¨us d¢ fy, vfgZr ugha g¨xk ;fn og ml l¨lkbVh ;k fdlh vU; l¨lkbVh ds çfr fdlh ,sls _.k ;k vfxze d¢ fy, tks mlus ,slh l¨lkbVh ds lnL; ds :i esa fy;k gS] ckjg ekl ls vfèkd dkykofèk d¢ fy, O;frØeh jgrk gS] fuokZpu d¢ çde ij ykxw g¨xhA rFkkfi] èkkjk 50 & d ¼2½ dk ijarqd fuokZpu&i'pkr~ çde ij ykxw g¨xkA ¼iSjk 17
vfèkfu;e] 1960 dh èkkjk 50&d esa ml O;fä d¨ lapkyd eaMy dk lnL; cus jgus ds fy, lquokÃ dk leqfpr volj fn;k tkuk fofufnZ"Vr% ifjdfYir ugÈ gS ftls fujgZ djuk pkgk x;k gS] dkuwu esa uSlfxZd U;k; d¢ fl)kar dk ikyu iढ+k gh tkuk pkfg, D;¨afd rRçfrdwy d¨Ã Li"V vkKk ugÈ gSA bl çdkj] vfèkfu;e] 1960 dh èkkjk 48ⅆ rFkk 50&d] n¨u¨a ds fo'ys"k.kkRed ijh{k.k ls nf'kZr gksrk gS fd ;s n¨u¨a micaèk fÒUu&fÒUu {ks=ksa esa çÒkoh g¨rs gSa v©j mud¢ ykxw g¨us dk çØe fdlh fn, x, ekeys dh rF;kRed ifjfLFkfr ij fuÒZj djsxkA ¼1978½1 ,l lh lh 405] ¼2008½ 14 ,l lh lh 151] ¼2005½ 6 ,l lh lh 321] ¼1985½ 3 ,l lh lh 545] ¼1993½ 1 ,l lh lh 78] ¼2007½ 2 ,l lh lh 181] ¼1981½ 1 ,l lh lh 664 rFkk ¼1969½ 2 ,l lh lh 262 fufnZ"VA ¼iSjk 18
¼3½ uSlfxZd U;k; && fl)kar dk mís'; && uSlfxZd U;k; d¢ fl)kar dk mís'; U;k; lqfuf'pr djuk gh ugha] cfYd vU;k; d¨ j¨duk Òh gSA¼iSjk 18
¼4½ lgdkjh l¨lkbVh vfèkfu;e] 1960 ¼e-ç-½ && èkkjk 48ⅆ rFkk 50&d && e-ç- lgdkjh l¨lkbVh fu;e] 1962 && fu-45 && D;k lapkyd d¨ vgZ ugha gksus d¢ vk/kkj ij gVkus d¢ fy, èkkjk 50&d /kkj.kk micaèk gS ;k lquokÃ dk volj çnku djuk visf{kr gS && èkkjk 50 & d dks /kkj.kk micaèk vfÒfuèkkZfjr ugÈ fd;k tk ldrk && in dh /kkj.kkRed fjfä ugha gks ldrh && l{ke çkfèkdkjh ls lE;d~ :i ls eu¨fu;¨x djus d¢ i'pkr~ lapkyd eaMy d¢ lnL;¨a d¨ lquokÃ dk volj çnku fd;k tkuk visf{kr gSA 2015 jk-fu- 135 rFkk 2015 ¼2½ ,e ih ,y ts 300 voyafcrA ¼2002½ 2 ,l lh lh 7 çÒsfnrA ¼iSjk 19 ls 32
(1) Cooperative Societies Act, 1960 (M. P.) -- Ss. 48-AA and 50-A (2) -- opportunity of hearing -- judgments rendered in W.P. No. 6913/2017 Brij Kumar Chanpuriya v. State of M. P. decided on 15.5.2017 and W.P. No. 551/2019 Antar Singh v. State of M. P. decided on 17.5.2019 -- no apparent conflict of opinion. 2015 RN 135, 2012(2) MPHT 352 and 1969 MPJL 683 referred to. [ Paras 10 to 15
(2) Cooperative Societies Act, 1960 (M. P.) -- Ss. 48-AA and 50-A -- M. P. Cooperative Societies Rules, 1962 -- R. 45 (3) -- applicability of provisions and principles of natural justice -- removal and disqualification of directors and representatives -- whether both provisions apply in different spheres, i.e., pre- and post-election -- section 48-AA applies in both situations,i.e, pre-election stage and post-election stage -- section 50-A would apply to post-election stage -- section 48-AA specifically provides for reasonable opportunity of hearing -- section 50-A does not provide as such -- adherence to principles of natural justice must be read into statute as there is no clear mandate to contrary -- both provisions apply in different spheres.
Held: Mere fact that the legislature in section 48-AA of the Act of 1960 having specifically provided for giving reasonable opportunity of hearing to the members who are sought to be disqualified from the office, has not done so in the proviso to section 50-A(2), would not mean that the legislature expressly intended to exclude the applicability of principles of natural justice. [ Para 16
Section 48-AA shall apply in both situations i.e., at the time of election (i.e., pre-election stage) or if any person is disqualified after election (i.e., post-election stage). Sub-section (1) of section 50-A, which provides that no person shall be qualified to be a candidate for election as member of the Board of Directors, representative or delegate of the Society if he is in default for a period exceeding 12 months to the Society or any other Society for any loan or advance taken by him, shall apply at the stage of election. However, the proviso to sub-section (2) of section 50-A would apply to post-election stage. [Para 17
Section 50-A of the Act of 1960 does not specifically envisage for giving reasonable opportunity of being heard to the person who is sought to be disqualified, to continue as member of the Board of Directors, adherence to principles of natural justice must be read into the statute as there is no clear mandate to the contrary. Analytical examination of both section 48-AA and section 50-A of the Act of 1960 would thus show that these two provisions operate in different spheres and stage of their applicability would depend upon fact situation of a given case. (1978) 1 SCC 405, (2008) 14 SCC 151, (2005) 6 SCC 321, (1985) 3 SCC 545, (1993) 1 SCC 78, (2007) 2 SCC 181, (1981) 1 SCC 664 and (1969) 2 SCC 262 referred to. [Para 18
(3) Natural Justice -- object of principles -- aim of principles of natural justice is not only to secure justice but also to prevent miscarriage of justice [Para 18
(4) Cooperative Societies Act, 1960 (M. P.) -- Ss. 48-AA and 50-A -- M. P. Cooperative Societies Rules, 1962 -- R. 45 -- whether section 50-A is deeming provision for removal of director as disqualified or opportunity of hearing is required to be given -- section 50-A cannot be held to be deeming provision -- there cannot be deemed vacation of seat -- competent authority, after due application of mind, would be required to give opportunity of hearing to members of Board of Directors. 2015 RN 135 and 2015 (2) MPLJ 300 relied on. (2002) 2 SCC 7 distinguished. [Paras 19 to 32

JUDGMENT

Rafiq, C.J:- 1. All these matters have been laid before the Full Bench upon a reference from a learned Single Bench of this Court vide order dated 25.4.2019, assuming conflict between the ratio of two judgments rendered by Division Benches of this Court, one in Writ Petition No.6913/2917-Brij Kumar Chanpuriya v. State of M.P. & others decided on 15.5.2017 and another in Writ Appeal No.551/2019-Anter Singh & others v. State of M.P. & others decided on 17.5.2019, for answering the following three questions of law:-

“1. Whether the order passed by the Division Bench of this Court in WP No.6913/2017 on 15.5.2017 lays down the correct law in regard to section 48-AA and section 50-A of the Act of 1960 or the order passed in Writ Appeal No.551/2019 affirming the order passed by the Single Bench of this Court in WP No.5033/2019?

2. Whether the provisions of section 48-AA and section 50-A of the Act of 1960 operates in a different sphere i.e. pre and post election of the Director?

3. Whether section 50-A of the Act of 1960 is a deeming provision for holding a Director of a society as disqualified or an opportunity of hearing is still required to be given as held by this Court in WP No. 6913 of 2017?”

2. The petitioners in all these writ petitions were the Directors of the various Cooperative Central Banks, who assailed their removal as such Directors, on the ground of breach of principles of natural justice as well as non-service of notice prior to their removal in terms of section 48-AA of the Madhya Pradesh Cooperative Societies Act, 1960 (for short ‘the Act of 1960”). All the petitioners in their capacity as representatives of the parent Cooperative Societies were elected as Directors of the District Cooperative Central Banks and were removed/disqualified to continue as such Directors, because the Societies, of which they were representatives, were in default for exceeding 12 months.

3. We have heard learned counsel appearing for the petitioners and learned Additional Advocate General for the respondent/State. The arguments on behalf of the petitioners have been led by Smt. Shobha Menon, learned Senior Advocate and other advocates appearing for the petitioners in respective petitions have also made the submissions, who have substantially adopted her arguments.

4. Learned counsel appearing on behalf of the petitioners argued that the petitioners were elected representatives from different Cooperative Societies and in that capacity, they were further elected as Directors of the another Cooperative Society, which is in each case is a separate Central Cooperative Bank in terms of rule 49-C of the Madhya Pradesh Cooperative Societies Rules, 1962 (for short “the rules of 1962), as per the procedure contained in rule 49-E of the Rules of 1962. The Registrar/Joint Registrar illegally removed them from the office of the Directors without following the provisions of section 48-AA of the Act of 1960 which mandates for providing an opportunity of hearing to any such Directors/representatives before their removal/disqualification. Section 50-A of the Act of 1960, especially proviso to sub-section (2) thereof, would not be applicable to the case of removal of any Director/representative as it operates in entirely different sphere and applies to only pre-election stage of a candidate or voter, for election to Board of Directors, as representative or delegate of the Society. Once the petitionersewere elected as Directors/Members of the Board of Directors in terms of section 48-B of the Act of 1960, they were entitled to continue in that capacity till next election of the members of the Board of Directors in terms of section 48-B of the Act of 1960. Besides this, Section 49(7-A)(d) of the Act of 1960 also ordains that the term of the representatives elected by the Board of Directors to other societies shall be co-terminus with the term of Board of Directors of the Society. It is argued that rule 45(3) of the rules of 1962 applies to eli